President Joe Biden’s Visit to Vietnam:Understanding New Dynamics

The two governments worked extensively to establish and foster mutual understanding as well as to map out a forward-looking course toward the opportunities and challenges in a rapidly changing world, which led to the unprecedented and historic elevation of relations between the two nations from a Comprehensive Partnership established in 2013 to a Comprehensive Strategic Partnership [1]. In the past five months, Biden hosted his Japanese and South Korean counterparts for a summit at the famous Camp David presidential retreat, the Indian prime minister with a lavish state dinner, and hosted the president of the Philippines at the White House for the first time in more than ten years. These events have led to stronger diplomatic, military, and economic ties establishing a network of allies and partners marked, if not by hostility towards China's increasingly aggressive military and economic posture, then at least by a growing sense of caution and concern [2].

Alongside China, Biden was up against competition from other nations as well. It was reported that Vietnam was getting ready to make a covert purchase of weapons from Russia, its longtime armaments supplier as Biden arrived in Hanoi. In this regard, a senior administration official stated that Biden would outline initiatives that would assist Vietnam in diversifying its economy and reducing its reliance on Russian weapons [3].

Not about containing China:

Upon the visit, President Joe Biden particularly stressed that he was not attempting to ignite a "cold war" with China and that instead, his goal was to strengthen American relations with Vietnam and other Asian nations in order to promote stability throughout the world [4]. After visiting the G20 summit in India, Biden remarked during a press conference in the capital of Vietnam, that his visit was not about restraining China but for a “stable base”. This forms part of the wider strengthening of alliances across Asian nations to counter China's dominance. According to Biden, American businesses are looking for alternatives to imports from Chinese manufacturing and Vietnam wants to exercise some degree of independence, therefore, he is seeking potential allies and attempting to defuse tensions with China [5].

In response to one query, Biden informed the reporters that while visiting India, he had a meeting with Chinese Premier Li Qiang. Since Biden and Xi Jinping, spoke at the G20 summit in Indonesia last year, this meeting represents the greatest level of interaction between American and Chinese officials as President Xi had skipped the talks in India and Li was sent in his place. In this regard, Biden stated that the interaction was not at all confrontational and that the conversation was about stability [6].

New Deals and Partnerships:

The relationship between the USA and Vietnam has "entered a new stage," according to US President Joe Biden. He said that the two countries were advancing their cooperation in crucial fields like cloud computing, semiconductors, and artificial intelligence (AI) [7]. The Presidential visit marked new deals on aircraft and AI, where executives from leading American and Vietnamese companies in the semiconductor, IT, and aviation sectors made genuine strides toward creating commercial alliances.

The Vietnam-U.S. Innovation & Investment Summit was attended by senior executives from Google, Intel, Amkor, Marvell, GlobalFoundries, and Boeing. Conversely, the Nasdaq-listed electric vehicle manufacturer VinFast, flag carrier Vietnam Airlines, IT business FPT, MoMo, the nation's largest e-wallet by users, and internet firm VNG, which filed for a U.S. IPO in August, were among the officials and executives from Vietnam. At the meeting, Biden highlighted that the two nations were expanding their cooperation in the fields of cloud computing, semiconductors, and AI emphasizing the importance of Vietnam as a source of essential mineral supplies [8]. Other than statements made by American businesses, it is unknown what else the collaboration would entail, however, it was reported that under the CHIPS Act, the US government has access to $100 million per year for five years to boost international semiconductor supply chains which may go to Vietnam. Taking cognizance of Vietnam's struggle with a severe lack of engineers in the semiconductor industry, more funding for the training of competent people is also included in the agreement. Strengthening supply chains for essential minerals, particularly rare earths, is another important concern. According to estimates from the USA, Vietnam has the second-largest resource of rare earths in the world behind China. Since the industrial dynamic is seen by the USA as a crucial nation in its attempt to protect global supply chains from China-related threats or concerns, the government has been pushing for the improvement of diplomatic ties with Vietnam [9].

In a contract worth around $7.5 billion, Vietnam Airlines has agreed to purchase about 50 Boeing 737 Max airplanes. According to a statement from the White House, the agreement will sustain "over 33,000 direct and indirect jobs" in the USA. Furthermore, Amkor Technology of Arizona will begin operations in October at a new $1.6 billion factory in the province of Bac Ninh. Marvell Technology of Delaware and Synopsys of California will make investments in semiconductor design and incubation facilities in Saigon and Ho Chi Minh City, respectively. The White House also announced that Microsoft will create a "generative AI-based solution tailored for Vietnam and emerging markets," and that NVIDIA will collaborate on AI in Vietnam alongside FPT, Viettel, and Vingroup [10].

Other takeaways:

The visit also led to new activities and initiatives worth around $100 million being announced by the United States Agency for International Development (USAID). These initiatives will be undertaken in partnership with the Government of Vietnam. These include addressing and overcoming the legacies of war, by enhancing the commitment of Dioxin remediation at Bien Hoa and expanding support to people suffering from disabilities caused by Agent Orange during the US-Vietnam war. Further, USAID's initiatives would include supporting Vietnam to compete in a global digital economy, enhancing the higher education system, and upskilling the workforce. Moreover, the USA has committed to fostering digital development, advancing global health security, and making the Mekong Delta region more resilient towards climate change [11].

President Biden reaffirmed his support for ASEAN centrality and promised to work more closely with the group at multilateral forums like the East Asia Summit (EAS), the ASEAN Regional Forum (ARF), and other ASEAN-led mechanisms, according to US Ambassador to ASEAN Yohannes Abraham. Hence, the USA contributes value to its improving engagement with ASEAN as a whole by deepening its ties with Vietnam [12].

Vietnam’s multi-alignment or de-risking:

Experts note that Vietnam is unlikely to abandon China, a vital partner for its economic development and prosperity, despite the country's developing connections with the USA. According to experts, China is both an "obstacle" and an "impetus" for improved security ties between Vietnam and the USA. Being too close to the USA spontaneously can be interpreted as provoking China and could lead to the kind of backlash that Vietnam is trying to avoid. But establishing links with the USA enables Vietnam to protect itself against China [13].

Vietnam's foreign policy has been one of independence, self-reliance, diversification, and multilateralization ever since the end of the Cold War. This concept remains time-tested and has been regularly followed, greatly improving the nation's success, and raising its international stature. The rationale for this approach can be traced to back Vietnam's Cold War alliance with the Soviet Union which did not prevent China from occupying Vietnam's islets and sand banks in the Spratly Islands in 1988. Therefore, Vietnam's autonomous and self-sufficient foreign policy serves as both a warning to the country and a declaration to the outside world. Furthermore, Vietnam’s view of a "strategic partnership" is not primarily defined by defense and security arrangements, unlike its Western counterparts. For Vietnam it is all-encompassing, and defense and security ties do not necessarily have to be at the center or most important aspect of such a relationship [14].  

USA's commitments towards enhancing Vietnam's technology industries might propel that country further up the value chain of manufacturing, allowing Vietnam a firm de-risking from China which might be perceived as a potential threat to China's market supremacy. Although it is unlikely to remove China from supply chains in the near future, several analysts are of the view that China's strategy of exploiting its neighbour in Southeast Asia as a re-exporting centre might come under further scrutiny [15]. On the other hand, the Global Times has reported that the state visit has a symbolic gesture with limited outcomes noting that the participation of Vietnam and China cannot be detached from regional development [16]. Hence, it can be speculated that the elevated bilateral ties between the two countries are a way for Vietnam to diversify its options considering worsening China’s economy, supply chain disruptions, and increased geopolitical tensions without abandoning its previous arrangements.

Conclusion:

The Presidential visit can be called successful in the sense that it was able to elevate the bilateral ties with Vietnam encompassing sectors of strategic significance. Even if Vietnam does not interpret this as a firm security arrangement, the commercial alliances would bring a certain advantage to the USA against China. Here, it must be noted that President Biden has maintained the rhetoric of de-risking by not speaking overtly against Chinese assertiveness and instead focused on global stability. Conversely, given Vietnam’s time-tested approach of autonomy in foreign policy, it is possible that Vietnam is only looking at the USA as an alternative rather than a way to completely detach from China. Hence, the views from the American and Vietnamese sides remain non-confrontational towards China and that of de-risking.

Endnotes:

1.       FACT SHEET: President Joseph R. Biden and General Secretary Nguyen Phu Trong Announce the U.S.-Vietnam Comprehensive Strategic Partnership, The White House 10 September 2023 https://www.whitehouse.gov/briefing-room/statements-releases/2023/09/10/fact-sheet-president-joseph-r-biden-and-general-secretary-nguyen-phu-trong-announce-the-u-s-vietnam-comprehensive-strategic-partnership/

2.      Jeremy Diamond and Kevin Liptak, Biden in Vietnam makes his latest attempt to draw one of China’s neighbors closer to the US, CNN, 10 September 2023 https://edition.cnn.com/2023/09/10/politics/g20-summit-india-biden-vietnam-sunday/index.html

3.      Jeremy Diamond and Kevin Liptak, Biden in Vietnam makes his latest attempt to draw one of China’s neighbors closer to the US, CNN, 10 September 2023 https://edition.cnn.com/2023/09/10/politics/g20-summit-india-biden-vietnam-sunday/index.html

4.     Saskia O’Donoghue, Biden in Vietnam: US President not trying to start a 'cold war' with China, Euronews, 10 September 2023 https://www.euronews.com/2023/09/10/biden-in-vietnam-president-wants-to-usher-in-an-era-of-even-greater-cooperation

5.      Josh Boak and Aamer Madhani, Biden says US outreach to Vietnam is about providing global stability, not containing China, AP News, 11 September 2023 https://apnews.com/article/biden-vietnam-status-china-trade-ac8f9dd899f77910c42295769d3fedb6

6.     Josh Boak and Aamer Madhani, Biden says US outreach to Vietnam is about providing global stability, not containing China, AP News, 11 September 2023 https://apnews.com/article/biden-vietnam-status-china-trade-ac8f9dd899f77910c42295769d3fedb6

7.      US President Biden: Relations with Vietnam have 'entered a new stage', Reuters, 11 September 2023 https://www.reuters.com/world/us-president-biden-relations-with-vietnam-have-entered-new-stage-2023-09-11/

8.     Phuong Nguyen and Francesco Guarascio, US, Vietnam firms talk business during Biden visit; AI and Boeing deals unveiled, Reuters, 11 September 2023 https://www.reuters.com/markets/us-vietnam-firms-hold-business-summit-during-biden-visit-ai-deals-unveiled-2023-09-11/

9.     Nandita Bose, Francesco Guarascio and Trevor Hunnicutt, US and Vietnam ink historic partnership in Biden visit, with eyes on China, Reuters, 10 September 2023 https://www.reuters.com/world/us-vietnam-elevate-ties-during-biden-visit-with-eye-china-2023-09-09/

10.   US, Vietnam reach deals on planes, tech, and human rights as Biden visits, Reuters, 10 September 2023 https://www.reuters.com/world/us-vietnam-reach-deals-planes-tech-human-rights-biden-visits-2023-09-10/

11.     President Biden Announces New USAID Commitments to Vietnam, US Agency for International Development, 11 September 2023 https://www.usaid.gov/news-information/press-releases/sep-11-2023-president-biden-announces-new-usaid-commitments-vietnam

12.    Elevation of relations with Vietnam helps promote US partnership with ASEAN: Diplomat, Vietnam Plus, 21 September 2023 https://en.vietnamplus.vn/elevation-of-relations-with-vietnam-helps-promote-us-partnership-with-asean-diplomat/268367.vnp

13.    Pranay Sharma, Former foes US, Vietnam come closer with signing of strategic partnership pact, Moneycontrol, 16 September 2023 https://www.moneycontrol.com/news/world/former-foes-us-vietnam-come-closer-with-signing-of-strategic-partnership-pact-11380551.html

14.   Nguyen Hung Son, The US-Vietnam Comprehensive Strategic Partnership Is Not All About China, The Diplomat, 14 September 2023 https://thediplomat.com/2023/09/the-u-s-vietnam-comprehensive-strategic-partnership-is-not-all-about-china/

15.    Kinling Lo, How will Biden’s hi-tech pledges to Hanoi affect China’s role in Vietnam and global supply chain?, South China Morning Post, 23 September 2023 https://www.scmp.com/economy/china-economy/article/3235487/how-will-bidens-hi-tech-industry-pledges-hanoi-affect-chinas-role-vietnam-and-global-supply-chain

16.   Chen Qingqing and Ma Jingjing, Biden’s high-profile visit to Vietnam ‘symbolic gesture’ with limited outcomes, Global Times, 10 September 2023 https://www.globaltimes.cn/page/202309/1297929.shtml

Pic Courtsey-Nariman Meshraffa at unsplash.ocm

(The views expressed are those of the author and do not represent views of CESCUBE.)